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Roger Harkel, CEO of Bestafer, Inc. seeks to raise $6.6 million in a private placement...

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Roger Harkel, CEO of Bestafer, Inc. seeks to raise $6.6 million in a private placement of equity in his early stage venture. Harkel conservatively projects net income of $5 million in year five and knows that comparable companies trade at a price earnings ratio of 20X. If the company has 1,000,000 shares outstanding before the private placement, what price per share should she agree to pay if her required rate of return is 50%? (Note: Assume investment is in standard preferred stock with no dividends and a conversion rate to common of 1:1. Round off to the nearest integer.) O $7/share $3/share $11/share $9/share $13/share

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